Within a decade of the cemetery opening, local residents tried to restrict burials to existing and pre-purchased grave sites. Just as the rapid spread of urban growth embraced Melbourne General Cemetery in Carlton, St Kilda also came under pressure. Strong population growth around the time of the gold rush era increased the number of local residents. Concerns were raised about the impact of a cemetery in the middle of a highly populated area. However it was not until 1900 that grave sites were finally declared exhausted and the cemetery closed for the sale of new graves.

In an attempt to raise income and to provide for cemetery maintenance, St Kilda Cemetery was reopened in 1928. An additional 250 graves were created by narrowing roads and pathways.